Saturday, November 9, 2024

Ryanair won’t ditch US shares as it reviews post-Brexit rules, says Michael O’Leary

Must read

Airline also keeping up pressure on Boeing to deliver aircraft on time for next summer

“When we first floated in 1997, the best thing we ever did was to have at least half the ownership in the US,” Mr O’Leary said.

“If you look at CRH, Flutter, they delisted from the Irish stock exchange and went to the US.

“Their multiples have gone up and their share prices have risen dramatically. We need to do something similar with Ryanair stock. I don’t think we will migrate to a US stock exchange because of the need to be majority EU-owned.

“It gets characterised here as the ADRs trading at a premium. In fact, it’s the ordinaries [ordinary shares listed in Ireland] that trade at a discount.

“The Americans will pay a higher premium for good earnings.

“So, typically, airline multiples in the States today are about 14 or 15 times earnings. Airline multiples in Europe are about nine, 10 times earnings.

“The ordinaries are trading at a meaningful discount to the ADRs.

“If we were to remove the restriction on non-EU [investors] buying ordinaries, I think you’d see the ordinaries trade up to where the ADRs are currently valued and we would have a much higher premium.”

As it held its annual general meeting in Dublin on Thursday, Ryanair announced it is reviewing rules it had introduced in 2021 following Brexit that ensured the carrier continued to be majority-owned and controlled by shareholders in the European Union.

Under EU rules, airlines based in the region must be majority-owned by shareholders in the bloc.

After the UK left the EU, Ryanair announced that all ordinary shares and US depository shares held by or on behalf of non-EU nationals, including UK nationals, would be treated as restricted shares.

These restrictions meant that holders of those shares have been unable to attend, speak at or vote at Ryanair’s annual meetings.

All of our focus is on getting the last bit of the aircraft delivered in time for summer 2025

Ryanair said on Thursday that as of the end of last month, about 49pc of its issued share capital was held by EU nations. Based on current trends, it expects it to reach 50pc within six to 12 months. It is now reviewing the restrictions on shares.

“I would certainly be in favour of removing the ownership restriction. I think we probably should be keeping the voting restriction, because at least that will ensure that we maintain EU control,” Mr O’Leary said.

Ryanair group chief financial officer Neil Sorahan has been in Seattle this week to meet Boeing’s new chief executive Kelly Ortberg and its chief operating officer, Stephanie Pope, as the airline continues to put pressure on the planemaker to deliver new aircraft on time.

Mr O’Leary will also meet Boeing bosses this autumn in Seattle.

“All of our focus is on getting the last bit of the aircraft delivered in time for summer 2025,” Mr O’Leary said.

Latest article